iGaming Business North America: Resurrecting the glory days of poker

Resurrecting the glory days of poker

Sergey Mukhanov, CEO at online gaming platform provider Connective Games, on why there is still life in poker and how operators can unlock it?

For a long time, analysts and experts have been writing poker’s obituary. In New Jersey, the vertical has played second fiddle to online casino since the market opened back in November 2013, while in Nevada only Caesars Interactive remains after Ultimate Gaming went bust and Real Gaming never really got off the ground. Back in the Garden State, the only regulated online poker market of note in the US, revenues continue to trend below even the lowest pre-launch estimates, with operators such as Tropicana and Golden Nugget putting their poker products on ice to focus solely on casino.

The death knell was about to sound, but then PokerStars was awarded a license by the state’s Division of Gaming Enforcement and suddenly people were once again excited about the potential of the vertical. Since going in live in March, the world’s largest poker site has breathed life back into the sector with its world-class platform and product offering, sleek UX and eye-catching prize pots. Claims they would double the size of the poker market have yet to materialize, but the uptick in play and revenues shows that with the right approach, there is plenty of life left in poker.

Barren player pools

In the long-term, the success of online poker in the US lies in being able to attract millennials to the game, by offering a compelling mobile product, and finding ways of flooding the near-barren liquidity pools. New Jersey’s Achilles heel is that state law requires wagers to be placed via servers based in Atlantic City, meaning it is near-impossible for the state join forces with other regulated jurisdictions - Nevada and Delaware are already doing this. This, of course, is one for the regulators, and as PokerStars has shown, operators need to remain focused and do all they can to provide the best possible experience to players.

In European markets, the focus has been on re-thinking traditional poker games for the mobile generation; so making games faster, simpler, and more attractive to recreational users. Sit & Go formats have very much changed the game, as have attempts to overhaul poker room ecologies and restructure rewards and loyalty programs. But in most cases, these changes have not been rolled-out in the US due to regulatory restraints and heavy testing requirements. The result is that US-facing poker products are often archaic, clunky, and simply not up to speed when compared with online casino.

Move the needle

The size, or lack thereof, of New Jersey’s poker market is a big reason why more operators have yet to enter the fray. As a point of comparison, casino market leader Golden Nugget generated GGR of $3.66m in September, while Stars’ poker offering attracted just $744,000. Simply put, poker makes bad business sense at this stage. But those not entering the fold could be missing a trick. As more states push ahead with legislation – think New York, Pennsylvania, Massachusetts, and California – the potential for poker to burst back into life is huge and, in doing so, could change the landscape of the industry.

Take California. The legislative push at this time, and for the past six years, has been for poker only. Those wanting to enter the market – which would be the largest in the US based on population – will, of course, have to develop their own platform in-house or white-label a solution. A pretty big undertaking, especially when you think that the likes of PokerStars, partypoker and the WSOP are using their operations in New Jersey to test out their platforms, products, tournaments and marketing campaigns ready for when other state goes live, and more jurisdictions start pooling liquidity. This puts them ahead of the game.

Ahead of the game

This puts them very much ahead of the game. But for those who do not own their own platform, or wish to build one from the ground-up, choosing the right white-label solution will prove vital in order for them to compete with the power players. Not only does it need to be powerful and robust, but it also needs to be flexible and nimble. Regulatory quirks will be likely as each state decides what its own poker market will look like, and operators and suppliers will be expected to adapt. The tech needs to be modular, and configurable, highly customisable and scalable for operators both large and small.

If operators and their platform partners get it right, the potential is huge. If they don’t, those obituaries could very well see the light of day after all.

(Published by iGaming Business North America, Issue 27, October 2016, Page 34)